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DATE

Oct. 30, 2025

CALL PARTICIPANTS

  • President and Chief Executive Officer — Michael Raab
  • Chief Commercial Officer — Eric Foster
  • Chief Financial and Operations Officer — Justin Renz
  • Head of Investor Relations — Caitlin Lowie

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TAKEAWAYS

  • Total Revenue -- $110.3 million, reflecting 12% growth driven mainly by product sales.
  • IBSRELA Revenue -- $78.2 million, marking a 92% year-over-year increase and reaching a new quarterly high.
  • XPHOZAH Revenue -- $27.4 million, representing a 9% sequential increase from Q2.
  • Non-Cash Royalty and Commercial Milestone Revenue -- $4.8 million recorded, including a $3.4 million milestone from partner Kyowa Kirin Co.
  • Gross to Net Deductions -- IBSRELA at ~31% (down slightly from Q2), XPHOZAH at ~29% (flat from Q2).
  • Guidance Update -- Full-year IBSRELA revenue guidance raised to $270 million-$275 million based on ongoing momentum.
  • Net Loss -- Approximately $1 million (less than $0.01 per share), in line with the prior year.
  • Cash Position -- $242.7 million in cash, cash equivalents, and short-term investments at quarter-end.
  • R&D and SG&A Expenses -- R&D was $18.1 million; SG&A totaled $83.6 million, up due to commercial investments.
  • Record High Prescription Demand for IBSRELA -- Achieved all-time highs in new and total writers, and in refill and total prescriptions.
  • XPHOZAH Prescription Metrics -- Achieved quarter-over-quarter growth in total writers, new and rebill prescriptions, and total dispenses (including both paid and patient assistance prescriptions).
  • Pipeline Advancement -- Announced ARDX-10531 (“531”), a next-generation NHE3 inhibitor entering preclinical and manufacturing activities ahead of Phase 1 studies.
  • Management Change -- Sue Hohenleitner named Chief Financial Officer, succeeding Justin Renz.
  • Field Access Manager Impact -- Increased call activity improved prescription pull-through rates for both IBSRELA and XPHOZAH.
  • Long-Term Revenue Guidance -- Peak revenue targets reaffirmed as $1 billion for IBSRELA and $750 million for XPHOZAH.

SUMMARY

Ardelyx (ARDX +3.76%) delivered double-digit total revenue growth with IBSRELA leading the portfolio, substantially outpacing prior results and triggering an upward revision in full-year guidance. The company reported material improvement in prescription activity for both IBSRELA and XPHOZAH, citing higher prescriber engagement and prescription pull-through. A next-generation pipeline asset, ARDX-10531, was introduced, reflecting a renewed focus on internal R&D investment. Ardelyx ended the period with a strong cash balance positioned for continued capital deployment. Management transitions were formalized during the quarter, and an additional commercial milestone payment was recognized from Kyowa Kirin.

  • Michael Raab highlighted, "We are driving meaningful impact for patients, and we are creating lasting value for shareholders."
  • XPHOZAH registered its second consecutive quarter of growth in non-Medicare payer segments, potentially supporting future revenue streams.
  • IBSRELA patient satisfaction reached 88% per survey data presented at a recent gastroenterology meeting.
  • Management emphasized their strategy of continued commercial and pipeline investments, enabled by consistent operating cash flow.

INDUSTRY GLOSSARY

  • NHE3 Inhibitor: A compound targeting the sodium/hydrogen exchanger 3 protein to regulate sodium absorption in the gastrointestinal tract; tenapanor and ARDX-10531 are examples in Ardelyx's portfolio.
  • Gross to Net Deduction: The adjustment made from gross drug sales to reflect discounts, rebates, patient assistance, and other commercial incentives, resulting in net recognized revenue.
  • Pull-Through Rate: The proportion of issued prescriptions that ultimately result in completed fills and therapy initiations by patients.
  • TDAPA: Transitional Drug Add-On Payment Adjustment, a temporary reimbursement mechanism for new renal drugs under Medicare; discussed regarding past and current market dynamics affecting XPHOZAH.

Full Conference Call Transcript

Caitlin Lowie: Thank you. Good afternoon, and welcome to our third quarter 2025 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelyx.com. During this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ significantly from those described. We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q that will be filed today and can be found on our website at ardelyx.com.

While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Rabb, will begin today's call with opening remarks and an overview of the company's progress during the third quarter of 2025. Next, Chief Commercial Officer, Eric Foster, will provide an update on the performance of IBSRELA and XPHOZAH. Justin Renz, Chief Financial and Operations Officer, will conclude today's prepared remarks with a review of the company's financial performance during the third quarter ended September 30, 2025, before we open the call to questions. With that, let me pass the call over to Mike.

Michael Raab: Thanks, Caitlin. It's great to be here with all of you today to share our third quarter 2025 results. Another standout quarter for both IBSRELA and XPHOZAH. This performance demonstrates the power of our commercial model, the momentum behind our products, the exceptional execution by our team and the real-world impact that our differentiated therapies are having for both patients with IBS-C and for those with CKD on dialysis. We generated $105.5 million in product revenue during the third quarter, representing 15% year-over-year growth, a signal of strong demand across our portfolio.

In January, I outlined 4 key priorities for Ardelyx this year: one, to accelerate IBSRELA's momentum; two, to execute on our XPHOZAH strategy; three, to build the pipeline; and four, to continue delivering strong financial performance. 10 months later, it is clear that the team at Ardelyx is delivering on these key priorities, and as a result, we're building real sustainable momentum. I'd like to provide a bit more detail on each of these areas. IBSRELA continues to outperform and is the foundation of our portfolio and the main engine for Ardelyx' future growth. IBSRELA set yet another record, generating $78.2 million during the third quarter, a 92% increase over last year.

Demand growth is broad-based and demonstrates how vital this therapy is for patients. The IBSRELA team is doing an exceptional job expanding reach and deepening prescriber engagement and conviction. Every driver that has fueled our success remains strong, a passionate patient community, an engaged prescriber base and a novel commercial strategy. We expect this momentum to continue through Q4 and beyond. As a result, we are raising our guidance, and we expect to generate between $270 million and $275 million in IBSRELA revenue this year. XPHOZAH also had an incredibly strong quarter, generating $27.4 million in revenue, a 9% increase compared to Q2.

The XPHOZAH team is navigating this dynamic market with determination and agility as we execute on our strategy, ensuring patient access, strengthening clinical conviction among nephrologists and driving prescription pull-through. XPHOZAH is a valuable component of our growth, and we expect its contribution to our business will only grow over time. Today's announcement of ARDX-10531, which we will refer to as 531 is the next-generation NHE3 inhibitor and marks an important milestone for Ardelyx as we reinvigorate our pipeline. We at Ardelyx pioneered NHE3 inhibition and with tenapanor, we have the only approved modulator of this pathway on the market. With 531, we may be able to unlock even greater benefit for patients.

Early preclinical data demonstrates that 531 is a highly potent, highly soluble molecule that could open development opportunities across a broad range of therapeutic areas. Preclinical and manufacturing activities are underway in advance of a Phase 1 study. This investment in 531 reflects thoughtful stewardship of an important internal asset and is our first new development program in more than 3 years. We are committed to building a broad, sustainable pipeline, capitalizing first on an internal asset, while in parallel, we explore external opportunities. As we build this pipeline, we are taking a disciplined and forward-thinking approach, identifying opportunities where Ardelyx can win. We are going to leverage our expertise, assets and scientific clinical and commercial leadership to unlock value.

531 is a reflection of that approach, and I look forward to sharing more information on our plans for this molecule as we advance through the development program. Finally, I want to highlight our financial strength. With the meaningful revenues we expect to generate in 2026 and beyond, we're extremely well positioned to thoughtfully invest our capital in current commercial endeavors and to grow our pipeline. We are delivering on our 4 key priorities. We are driving meaningful impact for patients, and we are creating lasting value for shareholders. Before I hand the call over to Eric, I'd like to formally welcome Sue Hohenleitner to Ardelyx as our Chief Financial Officer.

She's a remarkable leader who brings deep financial and strategic expertise to Ardelyx, and she's already making her mark. Challenging our thinking, strengthening our plans and energizing our path forward. She's joining a highly experienced leadership team with the technical expertise, vision and enthusiasm to lead and write the next chapter for Ardelyx. With that, I'm pleased to turn the call over to Eric, who will share his perspectives on our commercial performance. Eric?

Eric Foster: Thanks, Mike, and it's great to be with you all once again. The commercial organization continues to operate at an exceptionally high level. Our commercial strategy is strong and continues to be the foundation of our success. We are focused on addressing areas of high unmet need, delivering first-in-class medicines, leveraging a targeted sales and marketing approach to both patients and prescribers and investing in high-impact patient services programs to improve access. I'm excited to share with you today how this focus drove our performance during the third quarter, starting with IBSRELA. The strong demand for IBSRELA continued during Q3, leading to our highest demand quarter since launch. Additionally, we delivered record highs in the following areas.

Revenue was $78.2 million, posting 92% growth year-over-year. We continue to see the strength of our field sales force and the impact of our marketing initiatives, which drove us to new highs in new writers and total writers, reflecting growth in both depth and breadth of writing. This increase in writers also led to growth in new refill and total prescriptions. Once again, the increased and focused activity from our field access manager team resulted in improved pull-through rates. These results clearly indicate that our strategies are working and our strong momentum continues. We remain focused on the patient, the prescriber and improving prescription pull-through so more patients can benefit from IBSRELA. First, the patient.

IBS-C patients are incredibly engaged and consistently seek information and new options to address their unmet IBS-C symptoms. In fact, more than 75% of surveyed patients report that they continue to experience the symptoms of IBS-C despite treatment on a secretagogue. In contrast, patients report highly satisfied with IBSRELA. In a poster, we presented earlier this week at the American College of Gastroenterology's Annual Scientific Meeting, 88% of surveyed IBSRELA patients reported treatment satisfaction. Further internal market research also suggests that when patients learn about IBSRELA, they are motivated to ask for the therapy by name, and when they do, physicians are highly likely to prescribe it. Our focus on the patient will continue.

In some areas, we will increase our investment in targeted patient marketing efforts to support our future growth expectations. Next is the prescribing health care provider. The investments we have made in our field-based team and physician marketing efforts continue to demonstrate that HCPs are highly responsive to IBSRELA's safety, efficacy and tolerability profile and its differentiated mechanism of action. Once again, we saw increased targeted activity from our sales team who drove expanded adoption and utilization. We maintain our focus on driving depth and breadth of prescribing among high-writing HCPs who are frequently seeing patients with IBS-C.

Our messages are resonating, and the team will continue to drive clinical conviction and ultimately to identify and prescribe IBSRELA for those in need. Finally, prescription pull-through. The investments we are making in this area are delivering improvements across the patient journey. Our field access manager team increased their call activity during Q3, translating into increased rates of prior authorization approvals and resubmission approvals. We continue to look for ways to improve the patient experience, lessen the burden on HCPs and help ensure that every patient who has prescribed IBSRELA gets on treatment. We are focused on addressing critical aspects of the patient and physician journey and maintaining and building momentum as we enter the fourth quarter.

As I mentioned earlier, my team and I just attended the ACG Annual Conference, and we heard directly from many HCPs about the impact of IBS-C and the important role that IBSRELA is playing for their patients. We are committed to the patient community, and we continue to bring important science to HCPs with 3 posters presented at the conference. I'm incredibly proud of all this team has accomplished, and I look forward to a strong close to 2025 on our path to more than $1 billion peak revenue. Now turning to XPHOZAH. The team continues to execute and drive demand. In Q3, the team delivered $27.4 million in revenue, a solid 9% revenue growth compared to Q2.

This demand-driven growth demonstrates a clear need among patients for XPHOZAH. Our strategy is anchored in access to XPHOZAH for all patients who receive a prescription regardless of payer. We are pleased that this strategy is working, and we remain confident in our long-term growth expectations. The team remains focused on driving clinical conviction among nephrologists to prescribe XPHOZAH for appropriate patients, encouraging prescriptions to be sent to ArdelyxAssist to ensure patients get on treatment and providing important resources to support prescription pull-through. Our steady and consistent progress is evident in the growth we see across a number of key demand indicators. Total writers grew quarter-over-quarter.

We grew new and rebill prescriptions, which resulted in growth in total dispenses compared to Q2, including increased volume for both paid and patient assistance prescriptions. In short, more patients have access to XPHOZAH today than ever before. We also saw continued improvement in prescription pull-through following our investment in the field access manager team. Importantly, we saw a second consecutive quarter of growth in the non-Medicare payer segments. These are all very encouraging indicators, demonstrating that the momentum we experienced in the second quarter continues through the third quarter as a result of our strong commercial execution.

We focus on expanding breadth and depth of XPHOZAH writing among healthcare providers and continue to place the nephrologists at the center of decision-making. We also connect with other stakeholders in the community, including the dialysis providers, renal dietitians and advocacy organizations that are important to patient care. We have a broad-based team focused across the patient journey and continue to engage with all stakeholders about the importance of XPHOZAH. I will be joining the team on Tuesday at the American Society of Nephrology's Kidney Week to engage directly with HCPs and learn from them about the value that XPHOZAH provides.

We also have 3 posters being presented that will further support our efforts and will highlight the importance of XPHOZAH for patients with elevated phosphorus. Consistent progress will fuel a strong finish to 2025 for XPHOZAH and create a solid foundation for further growth next year and beyond. I am proud of this team and their efforts in this dynamic market. We remain confident in our long-term peak guidance of $750 million. Looking at the fourth quarter and into next year across our portfolio of products, we will continue to execute our strategies at a high level and create new opportunities for growth. We have the right team and the right focus.

We're making a difference for patients and driving impact across the business, and we remain steadfast in our commitment to bring these important medicines to the many patients in need. I will now turn it over to Justin. Justin?

Justin Renz: Thanks, Eric. Ardelyx delivered an impressive quarter with continued meaningful growth for both products and another record-setting quarter for IBSRELA. We thoughtfully invested to improve our commercial opportunities, restart our pipeline and strengthened our balance sheet through significant top line growth. Starting with revenue. For the period ended September 30, 2025, we reported total revenue of $110.3 million, an increase of 12% compared to the $98.2 million we reported in Q3 of last year. The growth was primarily driven by an incredibly strong performance by IBSRELA, recording revenue of $78.2 million, an increase of 92% over the same period last year. The team's focus on driving increased demand for IBSRELA and improving prescription pull-through continues to drive this momentum.

The performance was also a result of expected improvement in our gross to net deduction, finishing the third quarter at approximately 31%, a slight improvement over Q2. We expect IBSRELA growth to continue, and as such, we are raising our guidance and currently expect to finish the year between $270 million and $275 million in revenue. XPHOZAH delivered another solid quarter of growth, generating $27.4 million in revenue during the third quarter of 2025, an increase of 9% compared to the second quarter of this year. Our gross to net deduction of approximately 29% was consistent with the second quarter.

Finally, you will note that we recorded $4.8 million in non-cash royalty and commercial milestone revenue during the quarter, a significant increase compared to previous quarters and last year. We are pleased to share that our partner in Japan, Kyowa Kirin Co., achieved year-to-date sales levels that triggered a $3.4 million payment, which will be passed along to Healthcare Royalty Partners later this quarter. Now turning to expenses. Third quarter expenditures were up compared to the same period of 2024, reflecting our investment in growth and spending levels were consistent with Q2 of this year. R&D expenses were $18.1 million for the third quarter of 2025 compared to $15.3 million for the same quarter of the prior year.

SG&A expenses were in line with our expectation at $83.6 million compared to $65 million we reported in the third quarter of last year and reflects our continued investments in commercial activities to drive growth. Our net loss was approximately $1 million or less than $0.01 per share in the third quarter compared to a net loss of approximately $800,000 in the same period of last year. In addition, our third quarter 2025 results included $4.8 million in non-cash revenue, $12.7 million in non-cash stock compensation expense and $2.2 million in non-cash interest expense. We are pleased to report positive quarter-over-quarter cash flow as a result of significant growth on the top line.

We finished the quarter with a very strong balance sheet, including $242.7 million of cash, cash equivalents and short-term investments. As I prepare to step away from the CFO role at Ardelyx, I would like to thank all the investors and analysts who I've had the pleasure to interact with over these past 5-plus years. I would also like to thank all of the Ardelyx team members who had the privilege to work with, and to all, I'm delighted to welcome Sue to the team. We've had the opportunity to work together in transitioning the various tasks over these past couple of weeks, and you will find her to be a strong and capable financial leader.

I look forward to following Ardelyx in the future as I begin my next journey. With that, I'll hand it back to Mike.

Michael Raab: Thank you, Justin, not just for the thoughtful commentary that you provided as you finish up your final quarter with us, but for your leadership, your partnership and support of everyone at Ardelyx. Ardelyx' third quarter performance was a continuation of consistently delivering on our priorities. IBSRELA's strength is the foundation of our growth and the opportunities ahead for this business are significant. XPHOZAH remains an important contributor to our business. 531 is our reentry to product development and our strong cash position demonstrates our focus on being prudent stewards of our resources while investing in growth. I look forward to sharing more updates on our progress in the quarters ahead. Elvis, you can now open the call to questions.

Operator: [Operator Instructions]. Our first question comes from Chris Raymond of Raymond James.

Christopher Raymond: Best of luck to you, Justin. It's great working with you and hope to in the future. Just some questions. Maybe first of all, on IBSRELA. Just looking at the -- I guess, it's the SparxIT data that kind of sticks out to me the most. You guys have now sort of mid-teens share, I think, overall in the IBS-C market, but first-line share looks like it's also in the single digits.

Mike, maybe -- obviously, you got a long way to go to compete with Linzess for frontline share, but maybe just talk about how frontline use maybe is factoring into your long-range plans and what you guys are doing to try to make that more of a lever that you can pull? Then maybe the next question on the 10531, I guess you guys didn't talk about indications maybe for a reason, but just looking at the literature and potential targets for a potent soluble molecule here, some pretty big indications, hypertension, heart failure, maybe some diabetes indications. Are you looking at something as more broad or more of a targeted indication?

Michael Raab: Well, I think let me answer the second part first. We've got to take some baby steps before we go to the sprint in marathon, right? I mean we understand how to develop NHE3 inhibitors exceedingly well. The characteristics of the molecules are extremely unique and the fact that we've got one that's as soluble and potent as this does open up the opportunity to consider things like what you just described. It is premature for us to consider what indications until we go through these initial steps. As I said in my comments, the ability that we now have to invest in what we have created in NHE3 inhibition is an incredible strength.

I'll head it off questions that I'm sure are going to come is that this is well within our ability to spend and get it to the phases of development as we take advantage of the engine that IBSRELA is. To your questions about IBSRELA, I'll ask Eric to comment as well. I think as we've spoken in the past, Chris, the indication in our clinical work was first line, right? There is nothing in our label, nothing in our clinical work that says it cannot be first line. The growth that you see in that is completely organic.

When we started this effort to commercialize IBSRELA, we made the intentional decision to position it in a way that is second and third line because no matter what we did with PBMs and formularies, we would never be first line because we wouldn't generate the kind of revenue to supplant what they're getting from current first-line therapies. We are seeing that organic growth because it is a good drug and experience with physicians who are writing the scripts are being successful in driving those through. There are millions of patients on GCC agonist right now, 80% or more of which are dissatisfied with their therapy.

The market could grow no more, and we would still be able to meet our objectives and the projections that we've had. I think it's a really important way to think about the business is we -- because of the way that we've approached this, our target and our commitment to $1 billion or more is based upon second-line therapy with the established patients that are there and the call points that Eric and the team are pursuing. Anything to add to that, Eric?

Eric Foster: Thanks, Chris, for the question. Yes, the only thing that I would add to that, Mike, is we're coming off a third quarter where we've got all-time highs in new writers and total writers. Clearly, we are doing a great job of expanding breadth and depth and utilization of IBSRELA. With that comes confidence in the product when they see the results and the impact that it can have with patients. As you mentioned, we know that more than 75% of the physicians or patients that are out there are continuing to experience symptoms, so they need something different. We remain committed to our strategy.

We're pleased to see that it does get some utilization first line, as you noted, that we're indicated from a first-line basis, but we remain committed and very confident with what we saw in Q3 and the momentum that we're generating coming into Q4.

Operator: Next, we have Yigal from Citi.

Joohwan Kim: This is Joohwan Kim on for Yigal. Congrats on the quarter. Maybe just 2 quick ones for us. I know you had commented on solubility and potency, but just wondering if you could provide a little bit more color on what 531 is hoping to solve that was suboptimal versus tenapanor?

Michael Raab: Versus tenapanor is one way to look at it. When you have highly soluble gut-restricted drugs, you may have better penetration into the target of NHE3. Solubility matters to have a molecule do what it needs to do where you're trying to target it. Potency will bring you lower doses or better efficacy. That's exactly the preclinical work that we're embarking upon is to understand how best to leverage those qualities of this molecule. As I said in the previous question, it's premature for us to speak as to whether or not it is to answer questions that tenapanor can't or if there are other indications that make more sense to pursue.

Joohwan Kim: Maybe just one more, if I may. It seems like Israel is really continuing to take off due in part to the investment into the sales force. Just wondering, as you're seeing that there's still a big opportunity there, is there any consideration for perhaps increasing the sales force even further beyond what you had already done to reach that peak 750 as early as possible?

Michael Raab: I mean the one -- just a general comment, I'll ask Eric to comment on the specifics. Every day, we think about where else we can invest in this growth and this opportunity because what we see here in terms of the benefits providing patients, the organic growth that the previous question had in terms of moving into first line, this is a very good drug that's helping a lot of people. There are a lot of people that aren't being helped by it yet because of the breadth, depth and reach. There are many ways to communicate with those HCPs and those patients, and that broad-based approach is what we will always consider.

We will always look at new and better ways to penetrate, but certainly investing those considerations and investing in whether it's the fans of the sales force is something that Eric always considers.

Eric Foster: Yes. Thanks for that question. As Mike said, we're constantly looking at the data to see where we can continue to drive growth and value. As we're looking at the sales force, just recall, we're now about 3 to 4 full quarters in with the expanded sales force. What they've done is really raised the bar. Right now, I've got great confidence in this team. We are well on our path to achieve $1 billion peak year sales. As we go into Q4, I feel really confident about where the team is. We'll continue to look at the size of the field team, but we remain confident there.

Also just want to take the opportunity to remind you, it's not just the field team. We've got great marketing initiatives out there. We've got a wonderful field access manager team that's focused on pull-through. It's really a team effort out there that's driving the growth of IBSRELA.

Operator: Next, we have Roanna Ruiz from Leerink Partners.

Roanna Ruiz: A couple for me. One for thinking about IBSRELA. What pushes and pulls could impact your ability to reach the high versus low end of your new guidance? It did sound like you're making great strides with new and repeat prescribers as well. Could you give us a little bit more color like what's resonating there?

Michael Raab: Yes. I mean I think the guidance reflects our confidence in what we are doing with all the questions you've heard previously. I think that increased guidance in the range that we've provided is to show you our confidence in what we're going to deliver this year. I think Eric can go into some more of the specifics around it, but that should speak for itself. I think, Roanna, you've noticed over the years that we've taken a pretty conservative approach in the way that we provide these numbers. What we do is give you numbers that we are confident that we're going to meet. That's been consistently the way we've approached it over the years.

Eric Foster: Yes. Like I said earlier, I mean, we're very confident in the strategy we have. If you think a little bit about what I mentioned earlier, we know that there are millions of patients out there that are -- have been on or are on secretagogue. Again, more than 75% of those patients continue to experience symptoms of IBS-C. What they need is something different. We know that this is a multifactorial disease. They need something that potentially offers a different mechanism with a proven safety and efficacy profile. I mentioned the poster at the American College of Gastroenterology that was just presented showing that more than 85% of the patients out there were satisfied with IBSRELA.

We have a great opportunity out there to address a high unmet need in this patient population, and we continue to be confident with the strategy.

Roanna Ruiz: One question on 531. It did sound like it's just the beginning of building the pipeline. I was curious if there are any other targets or molecules that you're interested in or would consider? Is external BD also an option?

Michael Raab: Well, yes, I mean, to the second part first is, as you know, just under 2 years ago, we brought in Mike Kelleher to lead our corporate development efforts. He and his team are always looking and speaking to opportunities that are out there. We will pull the trigger on things when the right thing is there for us. As I said in my opening comments, we're now at a place where we could look at these assets that we had sitting on the shelf because they're really good. Are there other ones? There may be, but our focus at this point for our internal pipeline generated pipeline is 531.

Operator: Our next question comes from Dennis Ding of Jefferies.

Dennis Ding: Congrats on the quarter. Two questions for me. One on IBSRELA. You guys are running trials in peds less than 18 years old. Can you help frame the size of that market versus the adults and if that is already accounted for in your $1 billion peak sales guidance? Also maybe comment on the timing of clinical trials to go into CIC? Then number two, on XPHOZAH, congrats on the progress there, but there's still quite a large gap between where XPHOZAH is now and the $750 million you guys are guiding. What are things that are within your control to really accelerate that?

Michael Raab: Sure. Thanks for the question, Dennis. From the top, if you look at where we are with IBSRELA and where -- sorry, the pediatric trials were a commitment that you have to make to the agency. I think if you look at the total prescriptions that are out there for IBS-C, it includes those. The market that we're all penetrating is relatively small, but any IBS-C drug, those are included in the prescriptions there. We've not specified whether or not we are counting on that to get to the $1 billion because we're just looking at the total market as the market that we're penetrating. For CIC, we've not spoken of doing anything there.

It's obviously, as I spoke in your last meeting in London, that is obviously one that we would consider as we have the ability to pay for it. Those are the sorts of things we will look at. As it relates to XPHOZAH, I think as we've talked about this, it's important to note that when we ended last year, we lost 60% of the revenue that was being generated by XPHOZAH in an incredibly tumultuous market for these patients that are depending upon effective phosphorus management to survive in many cases. That turmoil is real. It's significant.

We just put numbers on the board that are as good, if not better, even having lost that 60% of the revenue for the entire portfolio. The strength of this team and what we've done, I think, is what you see in the results that we're speaking of today. We have great confidence in our ability to get to $750 million. I will leave it at that because we've spoken about the specifics numerous times of it's 1/3 of the TAM that we now have of 220,000 patients is what is required to $750 million.

If the need is as extensive and significant as we believe it is and demonstrated both by the paying and the patient assistance program patients, the turmoil of the TDAPA period is turmoil. Once you get past that, likely that's going to change.

Operator: Laura Chico from Wedbush Securities has our next question.

Thomas: This is Thomas on for Laura Chico. Just one from us. You discussed gross to net for 3Q earlier for XPHOZAH. Any thoughts on gross to net dynamics heading into 2026? How might this compare to 2025 levels?

Justin Renz: Thank you, Thomas. Our gross to net was approximately 29% for Q3, and we do think that will be somewhat consistent going to Q4. We're not in a position yet to discuss specifics around 2026. Look for us to update that in early 2026.

Operator: Next, we have Matthew Caufield from H.C. Wainwright.

Matthew Caufield: When we think about XPHOZAH and getting those prescriptions filled, should these essentially be primarily filled through ArdelyxAssist and the patient's pharmacy at this stage? Or are there scenarios where the drug could come through the dialysis center experience despite being external to the bundle, for example? Just trying to kind of best understand the patient journey there to access and growth.

Eric Foster: Yes, sure. That's an important question, I think, to really understand how we can make sure that these patients have access. As we said earlier, we remain committed to access for these patients regardless of who the payer is. On the non-Medicare side, it's covered through their prescription benefit. ArdelyxAssist can adjudicate it and they can also work with specialty pharmacies to deliver to the patient. On the Medicare side, ArdelyxAssist can fulfill that through our patient assistance program. Because we did not file for TDAPA, the dialysis organizations are not buying and billing it.

Important to note though, what we've seen is actually increased access when we think about patients, whether they're Medicare or non-Medicare, so more patients today have access to XPHOZAH than they ever have before. I think it's important to note that we've got a path to access for these patients, and we're continuing to be able to address the unmet need for them.

Operator: Our next question comes from Joseph Thome of TD Cowen.

Joseph Thome: Congrats on the progress, and let me add my best of luck to Justin. Maybe the first one on the new program. I guess anything that you can share on the profile of this drug, whether it's extended release? Or is there a way to, I guess, improve tolerability? Obviously, the NHE3 mechanism does result in some diarrhea. I guess, is that able to be modulated given that it's kind of...

Michael Raab: Joe, great question. I mean those are obviously the things that you begin to explore in the preclinical work that you're doing. I mean we have obviously years and years of experience and knowledge around the translation of what you see in animal models all the way through to human experience. Obviously, that's one thing that we would look at. The benefit that we together have learned about what NHE3 inhibition does, right, it's blocking sodium. Fundamentally, that's what it does. Then it's tightening the junctions, gosh, and that's where it works in phosphorus. That was not predictable.

Geez, it also has a benefit in pain, which one would never assume that, that was the case until you start the IBS-C work. Those 3 different things that this molecule, NHE3 inhibition does, does open a vista for lots of things to consider, contemplate exactly around the lines of what you questioned, but time will tell. It is early, early in the process, but we were excited to announce its development.

Joseph Thome: Yes, and a little bit related to that. I guess, maybe can you talk a little bit about why now is the right time? I guess, did you see anything preclinically that you can share that kind of triggered the announcement or anything in the field, I guess? Or is it just kind of continued progress and now I guess anything?

Michael Raab: Well, I kind of talked about it in a couple of previous questions is you look at the balance sheet that we have, we've not raised any money for years, and it's on the basis of what we're driving with IBSRELA and XPHOZAH that the balance sheet is as strong as it is. We had a very short dip after the end of -- or the start of the TDAPA period, and we're back with a balance that is what was prior to the start of the TDAPA period. That's an incredible accomplishment.

That then said to me and the team, we can begin to afford to explore other things that we might be able to do to build this company. 531 was an obvious choice because it was something we knew pretty well, and we began to pursue that. I think as you heard in my comments, I think this demonstrates that we've been extremely good and thoughtful stewards of the capital that we have. I think this is an example of how we plan on deploying.

Operator: Our next question comes from Julian Harrison of BTIG.

Julian Harrison: It's great to see another beat and raise for IBSRELA. You're at more than 70% year-over-year growth at the lower end of the new range for 2025. I guess looking to next year and beyond, I'm curious to what extent you think this cadence of growth can persist? Then looking towards the intellectual property estate, are you at a point now where you can talk more about how you're exploring extending exclusivity potentially beyond composition of matter? Are there any pending patent applications that you would highlight as potentially being Orange Book eligible?

Michael Raab: Yes, great questions. It is exactly what we are doing and should be doing to protect the franchise that we're building. Yes, of course, those things are all the things that we will contemplate and talk about when we can. I think what's important about your question is the growth that you see as you described for IBSRELA, the potential is spectacular, right? If you look at the number of scripts that we have compared to the market that's out there and the growth that is being driven by the need that's out there for the patients by Linzess and others, that is to our benefit over time.

Our belief is that reaching that $1 billion is something that's well within our control or we wouldn't have said that we expect it to be there. I think as we gain and continue to gain more perspectives and guidance, we can provide more guidance on when and how that is achieved. We're excited about the future for IBSRELA and what we're doing now, certainly with IBS-C and hyperphosphatemia with XPHOZAH. This mechanism, these drugs are making a huge difference. It's the work that Eric and his team are doing to show that conviction in physicians and getting those prescriptions pulled through.

Operator: Next, we have Aydin Huseynov of Ladenburg Thalmann.

Aydin Huseynov: Congrats with a great commercial quarter. Regarding business development activities, just curious on the kind of assets you're looking for? Is it more like a GI space? Or is it more like an early-stage Phase I preclinical? Or would you prefer something like Phase III plug and play or complementary to your commercial portfolio?

Michael Raab: The answer is yes to all of that at the right time, right? We're going to take some baby steps as we can begin to afford to do more. The natural thing is to look at therapeutic areas and the close adjacencies of the therapeutic areas that we're currently in. Like any biotech company, we're going to be opportunistic as something demonstrates itself. Me too is not very interesting. Even me better, not very interesting. I think this very special and unique way that we approach commercialization is a really important driver of the considerations that we have for things to bring in. That's the lens from which we look at things.

I think in the coming year, for sure, you're going to be hearing much more of that as we get our legs under us and look at opportunities that we are confident that we will bring in.

Aydin Huseynov: One more question, general question for me. You're making almost $400 million in annualized sales. You've got the -- you give about $75 billion long-term guidance and yet you're trading on $1.2 billion market cap. What do you think the market is underestimating, the long-term guidance itself or the future after 2033? Just curious on your thoughts on this.

Michael Raab: I'll be completely transparent, and we've talked about this before. I think there's an over-index on XPHOZAH, not giving this engine that we have at IBSRELA that do that it's -- the attention that it's due. What you see in terms of the growth and the benefit that it provides us in profit and operating cash for us to reinvest in the business, whether it is to expand our capacity capabilities on the commercial side, we will be thoughtful and measured in that.

Also, as we look at other things to bring in, it is something that we are looking forward to as we are on the cusp of generating that kind of free cash to build this company even further. I think we don't get that credit. I think if you look at many of the buy and the sell side, they are expecting at LOE, we may or may not make $1 billion. There's no consistency even in the way that people look at this product or products and whether or not they're giving them their due in the modeling that they do. That's our job, right, to also work with each of you to work on that.

I think it's a bunch of those things tell you the truth that I hope by now, we're beginning to get out of the penalty box of we're show me story. I think we've shown everyone again and again and again a meet and beat and that this is a substantive, big and important market, certainly for IBSRELA. As I said in my opening remarks, XPHOZAH is a contributor to that portfolio and will only continue to provide better contribution over time.

Operator: Next, we have Prakhar Agrawal of Cantor Fitzgerald.

Daz Patel: This is Daz on for Prakhar. Could you comment on any potential tailwinds or headwinds in 2026 that we should be aware of for IBSRELA and XPHOZ?

Michael Raab: I can't think of any. I think we're looking forward to getting out of the apices of what the bundle is doing for these patients and being able to help them to the degree that we believe we can and should. The turmoil is significant. I don't think -- I think that's not a headwind. I think that's a tailwind that ultimately is going to help us as we emerge from '26 with this remarkable product.

I think there are only tailwinds for both of them, not only because I'm an optimist, but I think everything that we're sharing with you today says that we've got the wind in our sails that are going to help us propel us to, at a minimum, the guidance that we've given for peak for both.

Operator: That concludes our question-and-answer session. With that, I'll turn the program back over to our host for any closing comments.

Michael Raab: Thank you, everyone, for joining the call today. We entered the fourth quarter with confidence in our strategy and enthusiasm for the future. We have the medicines, the focus on execution and the team in place to deliver on our vision of a healthier tomorrow for patients. I'd like to recognize our employees, the people behind every number that we share today. Their hard work, ingenuity and resilience continue to drive our success. Together, Team Ardelyx is determined to make a difference. I'd like to end by thanking our shareholders for your continued trust and support. We remain focused on driving sustainable growth and creating long-term value for you. With that, we can close the call. Thank you.